ASIC has obtained further court orders in its ongoing investigation into two Queensland-based self-managed superannuation fund advice companies accused of misleading investors about their investments.

ASIC’s investigation has so far found Royale Capital Pty Ltd (Royale) (now known as ACN 143 832 053) and ActiveSuper Pty Ltd (Active) raised $4.75 million from more than 200 investors (refer 12-161MR).

On 19 March 2013, following a hearing on 26 February 2013, the Federal Court of Australia made orders appointing Michael Gerrard McCann and Robert Graham Killer of Grant Thornton as joint and several provisional liquidators to MOGS Pty Ltd (ACN 136 499 360) (MOGS).

Previously, following a hearing on 3 December 2012, orders were made appointing provisional liquidators to companies in Australia, the British Virgin Islands (BVI) and the Cayman Islands, and several persons associated with the companies were prevented from leaving Australia.

On 3 December 2012, Damian Templeton and Darren Lewis of KPMG were appointed joint provisional liquidators to:

• Syndicated Property Group Ltd (BVI Company Number 1678711) (SPG)

• Worldwide Property Opportunities Ltd (BVI Company Number 1678279) (WPO); and

• Cayco Management (registration number Cayman Islands CR-265977) (Cayco)

The provisional liquidators’ role is to secure the assets of the various companies and establish the current financial position of each of them before reporting back to the court.

In addition, the following persons were added to the proceedings:

• Mr Jeffrey George, the director of SPG, WPO and Cayco

• Mr Graeme Sydney Stonehouse and Ms Marina Ulrika Lovisa Gore, the directors of MOGS

• Mr Mark Gordon Adamson, a former director of MOGS; and

• Mr Craig Kirrin Gore, the husband of Marina Gore.

On 3 December, the court also made orders preventing Mr Stonehouse, Mr Gore, Mr Adamson and Ms Gore from leaving Australia. These orders continue.

The matter returns to Court on 26 August 2013.

View ASIC’s statement of claim (PDF 1.54MB)

Background

In November 2012 ASIC obtained ex parte court orders appointing Mr Darren Lewis and Mr Damien Templeton of KPMG provisional liquidators to four companies based in the United States. These companies were collectively known as LLC Companies (refer:12-289MR).

In July 2012, ASIC obtained orders restraining Royale and Active, as well as their directors Justin Gibson and Jason Burrows, from dealing with any real properties purchased with their clients' self-managed superannuation funds (SMSFs) (refer:12-161MR).

ASIC’s guidance on self-managed super, including reference to various SMSF guides available through the Australian Taxation Office (ATO), can be found on its MoneySmart website.

What is alleged by ASIC

ASIC's investigation into Royale and Active began in November 2011. ASIC alleges clients of Royale and Active were cold called and encouraged to set up self-managed superannuation funds (SMSFs). They were then encouraged to make investments in, amongst other things, distressed properties in the USA. The investment in these properties by the SMSFs was to have occurred through the LLC Companies.

ASIC alleges that Royale and Active were not authorised to offer shares in the LLC Companies to the SMSFs under the provisions of the Corporations Act.

ASIC also alleges that Royale and Active offered investments to the SMSFs to purchase shares in WPO and SPG when a proper disclosure document was not first lodged with ASIC. ASIC is further concerned that the SMSF investors have been misled and deceived about the true nature of the use of the funds by those companies.

ASIC alleges that money subscribed to the LLC Companies, WPO and SPG were provided to MOGS as a loan to meet its day to day operating expenses.

ASIC alleges that Cayco as the investment manager of SPG and WPO was aware that it should have invested funds received by SPG and WPO from the SMSFs for real estate opportunities. At the time Adamson, a partner with the law firm Clamenz Evans Ellis based on the Gold Coast, was both a director of MOGS and Cayco.

While some properties were purchased in Arizona, these properties have since been sold.

ASIC continues to investigate the conduct of the defendants in the proceedings, including who has control of the sale proceeds of the Arizona properties.

Editor's note 1:

On 22 March 2013 the Full Court of the Federal Court of Australia (Victoria) refused an application by MOGS for leave to appeal the decision of 19 March 2013 appointing Mr Graham Killer and Mr Michael McCann of Grant Thornton as joint and several provisional liquidators to MOGS. The Full Court also refused an application by Graeme Stonehouse and Marina Gore for leave to appeal the decision of 19 March 2013 dismissing their application to set aside orders made against them on 3 December 2012.

Editor's note 2:

On 22 April 2013 the Federal Court of Australia (Victoria) appointed Mr Killer and Mr McCann of Grant Thornton (Qld) as joint and several receivers and managers of the property of the MOGS Unit Trust .

Editor's note 3:

The matter will now be heard in the Federal Court of Australia (Queensland) with the trial to start on 14 October 2013.

Editor's note 4:

The trial was heard in the Federal Court of Australia before Justice White in Brisbane from 14 October to 28 October 2013, with closing submissions heard between 2 December and 4 December. Justice White has reserved his decision.

Editor's note 5:

On 14 April 2015, His honour Justice White made principal findings, including that ActiveSuper, Royale, Messers Burrows and Gibson, SPG, WPO and Cayco contravened the Corporations Act, and that Messers George and Adamson and Mr and Mrs Gore were knowingly concerned in those contraventions. The matter was adjourned until 8 May 2015.